Presentation to Government Finance Officers Association

1. HIGHWAY FUNDING IN ARIZONA Presentation to Government Finance Officers Association March 7, 2007

2. MAJOR HIGHWAY FUNDING SOURCES • Highway User Revenue Funds (HURF) • Federal Highway Funds • Transportation Excise Tax Funds • Highway Expansion & Extension Loan Program (HELP)

3. HIGHWAY USER REVENUE FUND SOURCES AND DISTRIBUTION OF FUNDS FY 2006 TOTAL: $1,331.6 Million SOURCES DISTRIBUTION Economic Strength Fund $1 - 0.1% Other $55.9 4.2% DPS $66.7 5.0% MVD $0.6 0.0% Registration $158.8 11.9% Fuel $702.5 52.8% Counties $240.5 18.1% ADOT $539.8 40.5% VLT $373.9 28.1% Cities $386.2 29.0% Motor Carrier $40.5 3.0% ADOT 15.2% $96.8 7.3% NOTE: ADOT 15.2% represents ADOT’s allocation of HURF for MAG and PAG regional projects.

4. VEHICLE LICENSE TAX DISTRIBUTIONFY 2006 Vehicle License Tax $832.0 Million /1 Counties (Highway Purposes) 5.83% $48.7 Million HURF 44.99% $373.9 Million /2 State General Fund (School Aid) 0.0% $0.6 Million State Highway Fund 0.0% $0.3 Million /3 State Highway Fund 0.0% $0.1 Million County Gen. Fund 24.59% $204.2 Million Cities/Towns Fund 24.59% $204.2 Million NOTES: 1. The distribution percentage for each recipient based on statutory distribution. The State General Fund and State Highway Fund receive a share of the VLT only from alternative fuel vehicles, rental vehicles and privately owned vehicles used as a school bus, ambulance or fire fighting service. The other VLT recipients also receive a small amount of VLT from these vehicles. 2. Laws 2005, Chapter 306 (SB 1119) distributes 1.51% of the State Highway Fund share of HURF VLT to the DPS Parity Compensation Fund. 3. $13.6 million from the State Highway Fund and the $0.3 million from the State Highway Fund share of VLT was paid to the MVD Third Parties per HB 2026 and HB 2055 from the 1998 and 2001 legislative sessions, respectively in FY 2006. The reimbursements were previously paid solely from the State Highway Fund share of VLT until it was severely reduced from the VLT rate reductions.

5. Revenues from: Distribution breakdown: Distribution formulas: $.18 Gas Tax 50.5% to State Highway Fund 7.67% to Maricopa and Pima Counties for Controlled Access with a $.26 Use Fuel Tax (7/00) 75% and 25% split respectively. (Statutory 12.6% & Special 2.6% money) Vehicle Registration 4 2.83% to ADOT Discretionary. Motor Carrier Fee 44.99% of VLT (12/00) 27.5% to Cities & Towns One half distributed on basis of incorporated population and one half on Other the basis of county origin of gasoline sales and city or town population within each county. 3% to Cities over 300,000 Distributed to Phoenix, Tucson and Mesa based on population. 19% to Counties Distributed based on a portion of gasoline distribution and diesel fuel consumption and on a portion of unincorporated population. The split is as follows: 85/15 in FY 1997, 80/20 in FY 1998, 76/24 in FY 1999, and 72/28 in FY 2000 and thereafter) HIGHWAY USER REVENUE FUNDREVENUES AND DISTRIBUTIONS

6. HIGHWAY USER REVENUE FUNDFY 2006 REVENUES AND DISTRIBUTIONS (Dollars in Millions) NOTES: /1. Appropriation to MVD for vehicle registration enforcement program ($383,300) and 5 FTE positions for 3rd Party program ($250,000). /2. The 12.6% (statutory) and 2.6% (non-statutory) allocations from the State Highway Fund share of HURF distributions. /3. With the elimination of the VLT distribution to the state highway fund, a distribution is made from the state highway fund to MVD Third Parties for the collection of VLT. /4. Per Laws 2005, Chapter 306 (SB 1119), 1.51 percent of the state highway fund share of HURF VLT is distributed to the DPS Parity Compensation Fund.

7. FEDERAL FUNDING SOURCESFederal FY 2006 Obligation Authority ($601.9 Million) OTHER 23.2% INTERSTATE MAINTENANCE 19.3% BRIDGE 2.7% SURFACE TRANSPORTATION 21.4% EQUITY BONUS 12.2% NATIONAL HIGHWAY SYSTEM 21.2% Notes: 1. Other includes CM, SPR, HSIP, REC TRL, CBI, SRTS,HPP and redistributed. 2. Does not include Federal Lands or Special Projects.

8. FEDERAL HIGHWAY FUNDS • High Priority Project • MAG $4.5M * • PAG $7.7M * • All Others $12.2M * • * Note: Represents two years of apportionments • Highway Planning • MAG $.75M • PAG $.35M • All Others $.93M • Metropolitan Planning • MAG $4.0M • PAG $1.1M • All Others $0.5M

9. FEDERAL HIGHWAY FUNDS (Continued) • MAG and PAG Urban Surface Transportation Program (STP) • MAG $43.3M • PAG $10.7M • Congestion Mitigation and Air Quality (CMAQ) • MAG $41.5M • Bridge Replacement Program • Total $6.1M • Highway Safety Improvement Program • Total $6.8M

10. FEDERAL HIGHWAY FUNDS (Continued) • STP Enhancement Program • Total $8.0M • STP State Discretionary • MAG $2.5M • PAG $5.4M • All Others $9.2M

11. MPO/COG ASSIGNMENTS • Arnold Burnham PAG • Dianne Kresich MAG & CAAG • Sandra Gilbert CYMPO • Charlene Fitzgerald SEAGO, YMPO, WACOG • James Zumpf FMPO, NACOG

12. TRANSPORATION EXCISE TAX • State law allows any county to enact a transportation excise tax, with a vote of the electorate • Maximum amount is 10 percent of the State’s base rate • Funds can be used for any transportation purpose • Counties with a transportation excise tax • Maricopa • Pima • Pinal • Gila

13. HIGHWAY EXPANSION & EXTENSION LOAN PROGRAM (HELP) • Revolving loan program established in 1996 • To date, HELP fund has made 55 loans totaling almost $600 • million • Loan parameters: • Can lend to ADOT, cities, counties and Indian tribes • Project must be on Federal aid system and: • - Included in Board’s five-year program or • - Included in local TIP • On average, about $80 - $100 million of loan capacity each year • Board allocation guideline for distribution of HELP capacity • for FY 2006-10: • - MAG Region 37% • - PAG Region 13% • - TOC Region 50%

14. QUESTIONS? For additional information, please visit www.azdot.gov/inside_adot/fms/index.asp